The Year of Controversial Giving – Philanthrocapitalism in 2012
What does 2012 have in store for giving, especially the impact-driven approach to it we call “philanthrocapitalism”? Having peered into our philanthrocrystal ball, we see giving becoming more dangerous, more controversial, and more political, among other things, as philanthrocapitalists find themselves at the centre of some of the year’s biggest news stories.
Here are our 10 predictions for the coming year:
1. Greater scrutiny of the 1 percent. The role of the rich in setting the political agenda is going to be one of the big stories in the run-up to the U.S. presidential election in November. Philanthrocapitalists hungry for impact are increasingly looking to get leverage by influencing government policy, and this election will set the policy agenda for the next four years at a time when America (and, along with it, the world) faces some tough choices. We have been here before, of course, with George Soros’ support for the “Move On” campaign in 2004, which was ultimately unsuccessful in unseating the incumbent president, George W. Bush. The influence of the Koch brothers on the right is already on the media’s radar, but there are plenty more to be discovered. Expect donors of the left and the right to pitch in to this contest using political donations and philanthropic giving to support policy thinking on issues like budget priorities and health care and school reform. Is this philanthropy or plutocracy? We will all be talking about that this year.
2. Nation building is back. Politics will also be a big theme of philanthropy around the world, which may bring with it genuine danger for those involved. From the nations involved in the Arab Spring to Vladimir Putin’s (for now) Russia, and maybe even North Korea, philanthropists are going to be getting involved far more than in recent years in supporting civic movements and even political movements in countries where there is a real opportunity to change the political balance, hopefully in a more democratic and just direction. As the year-end crackdown on various American-backed nonprofits by Egypt’s military government should remind everyone involved, those threatened by this philanthropy are unilkely to take foreign interference in their countries lying down.
3. Crunch time for Muslim philanthropy. On a related point, 2012 is going to be a year of decision for Muslim philanthropists. There is a huge opportunity for them to strengthen civil society in the Arab Spring countries and work with the emerging entrepreneurs and social entrepreneurs there. Pakistan and Afghanistan are both in need of high-impact philanthropy. Yet with the honorable exception of the Aga Khan Foundation, too much of the giving from Muslim donors, including by some of the multi-billion-dollar foundations set up by the rulers of Gulf countries and their leading businesses, is still focused on traditional welfare and charity rather than social change. Yet change seems likely to happen with or without them, and if they do not help it along, it may well be at the expense of the Muslim wealthy. Perhaps this is an area where Turkey’s emerging philanthrocapitalists will show a lead to the rest of the Muslim world.
4. Occupy philanthropy. One of the big questions of the year will be whether the global Occupy movement will evolve from a necessary voice of protest into an effective force for change. There is an opportunity, and we believe an obligation, for philanthrocapitalists to help reform capitalism, so that it genuinely works in the interest of the population as a whole, not just a small subset of it. Andrew Carnegie understood the vulnerability of capitalism to the perception of it being inherently unfair; it is time today’s successful capitalists did so, too. The gradually increasing pack of CEOs who get it, such as Indra Nooyi of PepsiCo, Paul Polman of Unilever, and Sir Richard Branson of Virgin, have a huge opportunity to set the agenda for their peers, as long as they back up their words with serious action.
5. Steve Jobs, philanthropist. After spending his life being fairly dismissive of philanthropy, the late co-founder of Apple is likely to be one of the most prominent additions to the mega-giving scene in 2012. His widow, Laurene Powell Jobs, has long been involved in giving, having founded an organisation to get students from poor backgrounds into college, participating in the Clinton Global Initiative and Global Philanthropy Forum, and visiting Africa on a trip for philanthropists led by Ben Affleck. Now that she controls her late husband’s fortune, expect her to start putting it to good use.
We can also look forward to some weird and wacky philanthropy from new donors from the social media generation. The Facebook IPO is going to make a lot of people very rich and, since its founder Mark Zuckerberg has already signed up to the Giving Pledge, we are hopeful that the new cohort of wealthy will turn to philanthropy as a priority. The most entertaining philanthropist of 2011 was Silicon Valley venture capitalist Peter Thiel, who famously/notoriously offered $100,000 grants to get people to drop out of college and start a business, as well as supporting efforts to create new floating countries in international waters (“sea steading”) and launching a science fund closed to university academics, a large proportion of the people we normally think of as scientists. Plenty of people think Thiel is nuts, which is great. Too much philanthropy today talks about risk-taking without being willing to court controversy. Expect the donors of the social network generation to have no such fears.
6. Celanthropy’s new stars. Ben Affleck will become more prominent on the Hollywood philanthropy scene, though probably still lagging behind the likes of Brangelina, George Clooney, and Matt Damon. The celanthropist to watch, though, will be Lady Gaga, who we expect to take a big step forward in her giving, probably with a cause dear to the hearts of her “Little Monsters” (as she calls her young fans). Another celanthropist worth watching will be Ashton Kutcher, to see if he can recover as a force for good following a messy divorce and some unfortunate tweeting in 2011. Despite his and other bad celebrity experiences, the use of Twitter and other social media in philanthropy will continue to increase — which should mean even more celebrity mishaps this year.
Some giving dynasties will also move more clearly into the limelight. Will Chelsea Clinton, as well as championing social causes in her new TV job, take a bigger role at the Clinton Global Initiative? Expect greater interest to be taken in Barbara Bush, daughter of George W., and her health care nonprofit, Global Health Corps. And now that he is focusing on philanthropy, expect some bold initiatives from Howard Bufffett, grandson of Warren Buffett. Also watch out for the House of Windsor, as Britain’s Brangelina, Wills ‘n’ Kate, make a serious effort to build a celanthropic brand, hopefully learning from the ability of Princess Diana to draw attention to an issue and the underrated skills of Prince Charles as a social entrepreneur.
7. Deep impact. This will be a big year for “impact investing,” which explicitly seeks both financial and social/environmental returns. So far, there has been much more talk than action, but the time has come for the money to back the ideas. The Omidyar Network has already taken a lead, but some other big philanthrocapitalists will join it this year. Enter the Gates Foundation?
8. The great extinction. Alas, it is going to be a tough year for many nonprofits. We are braced for more scandals about inspiring narratives unsupported by facts, along the lines of the 2011 Greg Mortenson exposé. The pain of government spending cuts will be felt widely, both directly, as many nonprofits rely on money from government, and indirectly, as cuts to government services will lead to greater demand pressure on non-government alternatives. We think that many nonprofits will be faced with serious shrinkage and, in many cases, extinction. Our hope is that smart donors will grasp the nettle and try to manage this culling process, encouraging mergers wherever possible, so that the best of the nonprofit sector is preserved or, better still, made stronger.
9. Philanthrocapitalism the Chinese way. There was some schadenfreude when the Gates-Buffett visit to China in 2010 failed to drum up new signatories to their Giving Pledge, although that was not the immediate goal of their mission. We expect philanthrocapitalism to become an increasingly important force in China in 2012, though it will have a distinctive local flavor. Instead of traditional, American-style, foundation-oriented philanthropy, we expect a wave of stories about corporates playing a key role in solving social and environmental problems through a version of “social investment.” China is now hitting a difficult stage of economic development when it needs to manage its use of natural resources, stop competing on low labor costs alone, start tackling potential drags on its competitiveness, such as its rapidly aging population, and deal with rising expectations among the populations. All of this requires a wave of innovation, which China’s philanthrocapitalists are well placed to lead.
10. Some good news. We are hopeful for some big breakthroughs that will prove that philanthrocapitalism works. Will some of the few remaining countries still hit by polio announce that they are free of the disease? Will the death toll from malaria plunge even further and faster? We think so, and that as it does, it will validate the “posse” approach to solving the world’s problems at the heart of philanthrocapitalism. Expect more new posse partnerships to be announced, similar to the Malaria No More campaign led by Ray Chambers, which has galvanized a powerful coalition of the willing. This is a time of growing scepticism about the effectiveness of government, international aid, and even of giving. Yet clear evidence of results may start to change the mood and persuade a growing number of people that philanthrocapitalism is worth the risk.
Matthew Bishop and Michael Green are co-authors of Philanthrocapitalism: How Giving Can Save the World. Bishop is New York Bureau Chief of The Economist; Green is an independent writer and consultant.